Turkey’s Surging Output Fails to Wow

For economies still experiencing the worst of the global financial crisis, a double-digit expansion of a key output indicator would be a cause for wild-eyed celebration. In Turkey, industrial production data on Tuesday confirmed an 11.3% annual growth rate in November–the highest growth for more than a year–but markets merely shrugged.

Here’s why.

The hefty expansion in November was less about a momentous surge in output and more about the longer working month due to a religious holiday, economists said. The extra four days of work helped industrial output register a huge rebound from October’s 5.7% year-on-year contraction.

Market moves were also limited because the November expansion was flagged by central bank Governor Erdem Basci, who said industrial output–a crucial indicator of Turkey’s economic growth–would likely hit double-digits in November.

“Because of the shifting religious holiday dates and number of business days, we think that November industrial production has offset the bad production data in October … The data does not contain new information for the central bank, in our view, as this increase was expected as a reversal of weak October data,” said Ozgur Altug, chief economist with BGC Partners in Istanbul.

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